EXHIBIT 4.4
* Represents confidential information for which Ariba, Inc. is seeking
confidential treatment with the Securities and Exchange Commission.
FIRST AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
BY AND AMONG
SOFTBANK CORP.
SOFTBANK EC HOLDINGS CORP.
ARIBA, INC.
AND
NIHON ARIBA K.K.
DECEMBER 10, 2001
TABLE OF CONTENTS
Page No.
1 Definitions ...................................................... 1
2 The Company ...................................................... 5
3 Operation of the Company ......................................... 5
4 Board ............................................................ 5
5 Representative Director; Key Officers ............................ 6
6 Statutory Auditors ............................................... 7
7 Shareholders' Meetings ........................................... 7
8 Financial Statements and Accounting Records ...................... 7
9 Right Of Inspection .............................................. 7
10 Softbank Rights .................................................. 8
11 Company Interests ................................................ 8
12 Annual Business Plan ............................................. 8
13 Transfer Restrictions ............................................ 9
14 "Market Stand-Off" Agreement .....................................10
15 Exclusivity ......................................................10
16 Co-Sale Rights ...................................................12
17 Additional Capital ...............................................12
18 Right of First Offer .............................................12
19 IPO Commitment ...................................................14
20 Certain Breaches. ................................................14
21 Modification of Transaction Agreements. ..........................15
22 Representations and Warranties of SOFTBANK
and SOFTBANK Parent ..............................................16
23 Representations and Warranties of Ariba ..........................17
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24 Effectiveness, Term and Termination ..............................18
24.1 Term .....................................................18
24.2 Termination ..............................................18
24.3 Continuing Liability .....................................19
25 Incidental and Consequential Damages .............................19
26 Miscellaneous ....................................................19
26.1 Governing Law; Dispute Resolution ........................19
26.2 Notices and Other Communications .........................20
26.3 Language .................................................22
26.4 Severability .............................................22
26.5 References; Subject Headings .............................22
26.6 Further Assurances .......................................22
26.7 Expenses .................................................22
26.8 No Waiver ................................................22
26.9 Entire Agreement; Amendments .............................23
26.10 Assignment ...............................................23
26.11 No Agency ................................................23
26.12 No Beneficiaries .........................................23
26.13 Counterparts .............................................23
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This First Amended and Restated Shareholders Agreement (this "Agreement")
is made as of December 10, 2001 (the "Amendment Date"), by and among Nihon Ariba
K.K., a Japanese corporation (the "Company"), Ariba, Inc., a Delaware
corporation ("Ariba"), SOFTBANK Corp., a Japanese corporation ("SOFTBANK
Parent"), and SOFTBANK EC Holdings Corp., a Japanese corporation previously
known as SOFTBANK E-Commerce Corp. and a direct wholly owned subsidiary of
SOFTBANK Parent ("SOFTBANK"). The Company, Ariba, SOFTBANK Parent and SOFTBANK
are hereunder also referred to collectively as the "Parties" and individually as
a "Party". This Agreement supercedes and replaces the SHAREHOLDERS AGREEMENT
between the Parties dated as of October 19, 2000 (the "Prior Agreement"), which
the Parties hereby agree is amended and restated in its entirety by this
Agreement as of the Amendment Date.
RECITALS
WHEREAS, concurrently herewith, the Parties are amending and/or entering
into other agreements relating to the business and affairs of the Company; and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as
provided herein and to accept the rights and obligations created pursuant hereto
in lieu of the rights and obligations accepted by them under the Prior
Agreement.
NOW THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
1. Definitions.
1.1 "[*]" shall mean a Person, of which securities representing at least
[*] of the ordinary voting power is or, in the case of a partnership, at least
[*] of the general partnership interests are, directly or indirectly owned,
controlled or held by the Party on such date.
1.2 "[*]" shall mean a Person that directly or indirectly owns, controls,
or holds securities representing at least [*] of the ordinary voting power or,
in the case of a partnership, at least [*] of the general partnership interests
of the Party on such date.
1.3 "Affiliate" of a Person means any Person that is controlled by,
controls, or is under common control with the first Person, in each case for so
long as such control continues; provided, however, that Affiliates of any Person
shall include Persons in which the first Person owns, directly or indirectly,
shares representing at least [*] of the voting power represented by such
Affiliates' outstanding shares, regardless of whether such control actually
exists. For purposes of this definition, "control" shall mean the possession,
directly or indirectly, of power to direct or cause the direction of management
or policies of a Person (whether through ownership of securities or other
ownership interests, by contract or otherwise).
1.4 "Annual Business Plan" means the Company's annual business plan, as
approved by the Board each year for the Company's next succeeding year
including, among other things, (i) a budget for the upcoming fiscal year for
anticipated revenues and expenses of the Company, (ii) an expenditure budget,
(iii) a cash-flow forecast and (iv) the[*].
1.5 "Ariba" is defined in the preambles of this Agreement.
1.6 "Ariba Company Interest" means the Company Interest of Ariba.
1.7 "Ariba Investor" means Ariba and each Person that is an Affiliate of
Ariba to whom Securities owned by Ariba at the close of business on the
Effective Date and subsequently acquired by Ariba pursuant to Section 11 or 18
of this Agreement have been Transferred pursuant to this Agreement.
1.8 "Ariba Non-Disclosure Agreement" means the Non-Disclosure Agreement by
and between Ariba, SOFTBANK Parent and SOFTBANK dated October 19, 2000.
1.9 "Articles" means the articles of incorporation of the Company in the
form of attached Exhibit 2.1 to the Stock Purchase Agreement, as the same may be
amended from time to time in accordance with this Agreement and the Commercial
Code.
1.10 "Board" means the board of directors of the Company.
1.11 "Business" generally means [*] and (iii) any business ancillary
thereto.
1.12 "Business Day" means a day on which commercial banks in the United
States and Japan are generally open to conduct their regular banking business.
1.13 "Company" is defined in the preambles of this Agreement.
1.14 "Chief Executive Officer" means the Chief Executive Officer of the
Company.
1.15 "Co-Sale Shareholder" is defined in Section 16(a).
1.16 "Commercial Code" means the Commercial Code of Japan, as amended and
in effect from time to time.
1.17 "Committee" is defined in Section 19(b).
1.18 "Common Stock" means common stock of the Company as authorized by the
Articles.
1.19 "Company Interest" shall mean, for a Party, the percentage interest
represented by the number of Securities then held by such Party (assuming that
such
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Party has not Transferred any Securities) divided by the number of then
outstanding Fully Diluted Securities.
1.20 "[*]" is defined in Section 21(a).
1.21 "Director" means a member of the Board.
1.22 "Effective Date" means the Closing Date (as defined in the Stock
Purchase Agreement).
1.23 "Fully Diluted Securities" means the number of Securities outstanding
on a fully diluted basis after (i) giving effect to the exchange, exercise and
conversion of all outstanding exchangeable, exercisable and convertible
Securities and (ii) including all shares of Common Stock reserved and available
for the grant of options and or stock purchase rights to employees, officers,
directors and consultants of the Company that are not subject to outstanding
options.
1.24 "Investor" means each [*] and each [*].
1.25 "IPO" is defined in Section 19(a).
1.26 "Key Officers" means those Company officers who are in management
positions reporting directly to the Chief Executive Officer.
1.27 "[*]" is defined in Section 15(a).
1.28 "Litigation Committee" is defined in Section 20.
1.29 "Meeting Notice" is defined in Section 4(c).
1.30 "Modification Event" means the occurrence of the written notice by
Ariba to SOFTBANK pursuant to Section 21(b), except as otherwise provided in
Section 21(b).
1.31 "Notice" is defined in Section 18(b).
1.32 "[*]" is defined in Section 16(a).
1.33 "Offered Securities" is defined in Section 18(b).
1.34 "Party" and "Parties" are defined in the preamble of this Agreement.
1.35 "Percentage Interest" is defined in Section 15(b).
1.36 "Performance Criteria" is defined in Section 21(d).
1.37 "Person" means a natural individual, partnership, firm, corporation,
or other entity or form of business association.
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1.38 "Related Party Transaction" is defined in Exhibit 4(d).
1.39 "Release" means the Release, Reimbursement and Payment Agreement dated
as of the Amendment Date among the Parties.
1.40 "Representative Director" means a representative director of the
Company with the powers and duties specified for a representative director of a
corporation in the Commercial Code or the Articles.
1.41 "Schedule" is defined in Section 15(a).
1.42 "Securities" means all outstanding shares of Common Stock and any
other equity securities of the Company or instruments exercisable or
exchangeable for or convertible into Common Stock or other equity securities of
the Company.
1.43 "SOFTBANK" is defined in the preambles of this Agreement.
1.44 "Softbank Company Interest" means the sum of the Company Interests of
SOFTBANK and SOFTBANK Parent.
1.45 "Softbank Investor" means SOFTBANK, SOFTBANK Parent and each Person
that is an Affiliate of SOFTBANK Parent to whom Securities acquired by SOFTBANK
and SOFTBANK Parent on the Effective Date pursuant to the Stock Purchase
Agreement and subsequently acquired by SOFTBANK and SOFTBANK Parent pursuant to
Section 11 or 18 of this Agreement have been Transferred pursuant to this
Agreement.
1.46 "SOFTBANK Parent" is defined in the preambles of this Agreement.
1.47 "Special Exceptions Law" means the law pertaining to special
exceptions to the Commercial Code concerning auditors of companies (Kabushiki
Kaisha).
1.48 "Statutory Auditor" means a statutory auditor (Kansa-yaku) of the
Company with powers and duties as specified in the Commercial Code.
1.49 "Stock Purchase Agreement" means the Stock Purchase Agreement dated as
of October 19, 2000, as amended by Amendment No. 1 to Stock Purchase Agreement
dated as of the Amendment Date, among the Company, SOFTBANK Parent and SOFTBANK.
1.50 "Subject Affiliate" is defined in Section 15(a).
1.51 "Term" is defined in Section 24.1.
1.52 "Transaction Agreements" means the Stock Purchase Agreement by and
among the Company, Softbank Parent and Softbank dated October 19, 2000, as
amended by Amendment No. 1 to Stock Purchase Agreement by and among the Company,
SOFTBANK Parent and SOFTBANK dated as of the Amendment Date; First Amended and
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Restated Shareholders Agreement by and among SOFTBANK Parent, SOFTBANK, Ariba
and the Company dated as of the Amendment Date; Distribution Agreement by and
between the Company and Ariba dated as of the Amendment Date; Amended and
restated letter agreement by and between Ariba and SOFTBANK Parent dated as of
the Amendment Date (the "Letter Agreement"); Standby Purchase Agreement by and
among SOFTBANK, the Company, and Ariba dated as of the Amendment Date; and the
Amended Master Alliance Agreement by and between the Company and Softbank
Commerce Corporation dated as of the Amendment Date, including the Attachment
for Reselling of the same date and the Addendum to the Attachment for Reselling;
Appointment of Dealers of the same date.
1.53 "Transfer" is defined in Section 13(a).
2. The Company. The Parties hereby acknowledge that the purpose of the
Company shall be to establish and develop the Business.
3. Operation of the Company. Each Party agrees to take all actions
necessary to ensure that the Company shall be operated in accordance with the
terms of this Agreement and the other Transaction Agreements, including, without
limitation, to vote all Securities held by it (and to cause all Securities held
by any of its Affiliates and permitted transferees under Section 13 to be voted)
to effect the terms hereof.
4. Board.
(a) Board of Directors. The Company will be managed by the Board in
accordance with the terms of this Agreement and applicable law. The Board
shall consist of [*] Directors, [*] of whom shall be nominated by [*] and
[*] of whom shall be nominated by [*]. One of the Directors nominated by
[*] shall be the [*]. If the [*] at any time decreases to less than [*],
the Parties shall upon written notice from [*] cause the Board constituency
to be adjusted so that only [*] nominated by [*] within thirty (30) days of
such written notice. If the [*] at any time decreases to less than [*], the
Parties shall upon written notice from [*] cause the Board constituency to
be adjusted so that [*] nominated by [*], within thirty (30) Business Days
of such written notice, unless the [*] shall continue to hold at least [*]
of the Securities acquired by the [*] pursuant to the Stock Purchase
Agreement and pursuant to Sections 11 and 18 of this Agreement.
(b) Removal; Reappointment of Directors. Any Director may be removed
for cause in accordance with applicable law. In addition, each Party having
the right to appoint a Director pursuant to this Section 4 shall also have
the right, in its sole discretion, to remove such Director at any time by a
written notice to the Company and the other Party, in which event the Party
which nominated the Director in question shall cause such Director to
deliver a written resignation to the Company. In the case of a vacancy in
the office of a Director for any reason (including removal pursuant to the
preceding sentence), the vacancy shall be filled by the Party that
nominated or has the right to nominate the Director in question, subject to
obtaining the approval of a majority of the remaining Directors.
(c) Board Meetings. Each Director shall have the authority to convene
Board meetings, including the authority to specify the time and place of
such meetings
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(with video conference or any other legally permitted means of meeting
under the Commercial Code to be permitted at the request of any Director);
provided, however, that (i) the Board shall meet at least once during each
calendar quarter and (ii) written notice of each Board meeting (a "Meeting
Notice") shall be given not less than ten (10) Business Days in advance of
the meeting date (which ten (10) Business Day period may be shortened if
each Director either (A) grants a written waiver of notice of such meeting
or (B) actually attends such meeting, without objection). All Meeting
Notices shall include a proposed agenda listing the items to be discussed
at such Board meeting. Board meetings shall be conducted in the English
language (with Japanese interpretation) and minutes of such meetings shall
be prepared by the Company in English and Japanese and distributed to each
Director promptly following a meeting. In the event of conflict or
controversy between versions, the English version of the minutes shall
control. Proposals or reports brought before any Board or shareholders'
meeting for information or action (including without limitation the
Company's annual and semi-annual financial statements) shall be prepared in
English and Japanese. In the event of conflict or controversy, the English
version thereof shall control. Any and all reasonable travel costs
(including without limitation business class air travel) and expenses
incurred for purposes of attendance by a Party's Directors at Board
meetings held outside the country where the Party's corporate headquarters
is located shall be reimbursed by the Company.
(d) Board Quorum, Resolutions. A quorum shall be deemed to exist for
purposes of Board actions so long as at least four (4) Directors are
present, including one (1) Director appointed by SOFTBANK and one (1)
Director appointed by Ariba. If no Director nominated by SOFTBANK or no
Director nominated by Ariba attends a duly noticed Board meeting, such
meeting shall be immediately adjourned and rescheduled, and written notice
of such rescheduled meeting shall be delivered to the Directors not less
than five (5) Business Days in advance of the rescheduled meeting. If the
number of Directors who attend such rescheduled meeting is not sufficient
to constitute a quorum under the first sentence of this Section 4(d), a
quorum shall be deemed to exist for purposes of the rescheduled meeting
notwithstanding such non-attending Directors' absence so long as there is a
sufficient number of directors present to constitute a valid quorum
pursuant to the Commercial Code. Any action, determination or resolution of
the Board shall require the affirmative vote of a majority of Directors
present at a meeting at which a valid quorum pursuant to this Section 4(d)
is present. Notwithstanding the foregoing, the matters set forth on [*]
shall additionally require the affirmative vote of at least [*] appointed
by [*] or [*], provided that at the time such vote is sought the [*] hold
at least [*] of the Securities acquired by the [*] pursuant to the Stock
Purchase Agreement and pursuant to Sections 11 and 18 of this Agreement.
5. Representative Director; Key Officers. [*] shall designate [*]
Representative Directors of the Company in accordance with the Commercial Code,
one of whom shall be the [*]. [*] shall have the right to approve the [*] and
the [*] in its sole discretion upon prior consultation with [*]. [*] shall also
have the right, exercisable in its sole discretion upon prior consultation with
[*], (i) to remove and replace the [*] or any [*] at any time and (ii) to
appoint a successor [*] or [*] in the event a vacancy arises for any reason, in
each case effective upon the delivery of written notice to the [*] or the [*]
and the other Parties. Each Party agrees to cause the Directors nominated by it
to take appropriate action by the Board to effect any such removal, replacement
or appointment.
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6. Statutory Auditors. The Company shall have three (3) Statutory Auditors
whom shall be nominated by Ariba. A Statutory Auditor may be removed for cause
in accordance with applicable law. Ariba shall also have the right, exercisable
in its sole discretion, to remove and replace a Statutory Auditor at any time,
effective upon the delivery of written notice to the Statutory Auditor to be
removed and the other Parties. Ariba shall also further have the right to
appoint a successor Statutory Auditor in the event a vacancy arises for any
reason.
7. Shareholders' Meetings. Shareholders of the Company shall receive notice
of each shareholders' meeting at least ten (10) Business Days before the
scheduled date of such meeting. The Company shall have at least one
shareholders' meeting each calendar year. Such meeting will take place at such
time and place as is determined by the Board. Meetings shall be conducted in the
English language (with Japanese translation to the extent requested by SOFTBANK
paid for by the Company), and minutes of such meetings shall be prepared by the
Company in English and Japanese. In the event of conflict or controversy, the
English version of the minutes shall control.
8. Financial Statements and Accounting Records. Financial statements for
the Company, including without limitation a balance sheet, income statement,
statement of cash flows and statement of shareholders' equity, shall be
submitted by the Company to each of the other Parties (i) within sixty (60) days
after the end of each fiscal quarter for such quarter, and (ii) within ninety
(90) days after the end of each fiscal year for such year. Each of the annual
financial statements shall be audited and certified by an internationally
recognized accounting firm (which will act as an independent auditor under the
Special Exceptions Law) retained by the Company. All financial statements shall
be (i) prepared in accordance with generally accepted accounting principles in
Japan and (ii) in reasonable detail and shall contain such financial data as
Ariba, SOFTBANK Parent and SOFTBANK reasonably request in order to keep each of
them advised of the Company's financial status (although quarterly statements
need not include footnotes and may be subject to year-end adjustments).
9. Right Of Inspection. During office hours of the Company, and upon
reasonable notice to the Company, each of SOFTBANK, SOFTBANK Parent and Ariba
shall have full access to all properties, books of account, and records of the
Company, and each such Party shall have the right to make copies from such books
and records at its own expense. Any information obtained by SOFTBANK, SOFTBANK
Parent or Ariba through exercise of rights granted under this Section 9 shall,
to the extent constituting Confidential Information under Section 7.3 of the
Stock Purchase Agreement, be subject to the confidentiality provisions set forth
in such Section 7.3.
10. Softbank Rights. [*].
11. Company Interests. The Parties agree to implement the Company's capital
structure and the terms of this Agreement so that at all times during the term
hereof, [*].
12. Annual Business Plan. The Company's management shall discuss its
proposed Annual Business Plan with SOFTBANK before submitting such Annual
Business Plan to the Board for approval.
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13. Transfer Restrictions.
(a) Neither SOFTBANK Parent nor SOFTBANK shall, except as otherwise
specifically provided in this Agreement, sell, transfer, assign,
hypothecate or in any way alienate ("Transfer") any of its Securities.
(b) Notwithstanding Section 13(a), SOFTBANK Parent and SOFTBANK may
Transfer all or any portion of its Securities (i) to any [*] or [*] of such
Party or (ii) after the closing of [*], to any Person upon the completion
of such Party's compliance with the restrictions imposed by Section 14 of
this Agreement; provided that the following conditions shall be satisfied
in the case of a Transfer pursuant to clause (i) above of this Section
13(b):
A. (x) in the case of a Transfer to an [*], such Party covenants
that such [*] shall remain an [*] of such Party so long as the
transfer restrictions set forth in this Section 13 are in effect and
the [*] owns the Transferred shares; and (y) in the case of a Transfer
to an [*], such [*] covenants that it shall remain an [*] of such
Party so long as the transfer restrictions set forth in this Section
13 are in effect and the [*] owns the Transferred shares; and
B. such Party, or, in the case of a Transfer to an [*] or an [*],
such [*] or [*] represents and covenants that the shares transferred
to the transferee are not, and will not be, subject to any lien or
other security interest, whether direct or indirect, unless such lien
or security interest is consented to by the Company.
(c) Intentionally Blank.
(d) In the case of any Transfer permitted under Section 13(b)(i),
SOFTBANK Parent or SOFTBANK, as the case may be, shall deliver to the
Company and Ariba (i) at least ten (10) Business Days prior to such
Transfer, a written notice stating its intention to Transfer the Securities
to be Transferred, the name of the transferee, whether such transferee is
an Affiliate, the number of Securities to be Transferred, and the price and
other material terms and conditions of the Transfer, (ii) except as
otherwise specifically provided herein, on or prior to the effective date
of the Transfer and in a form reasonably acceptable to the Company and its
counsel, the transferee's written acknowledgement of and agreement to be
bound by, and to vote the Transferred Securities at all times in accordance
with, the terms of this Agreement and any other Transaction Agreement, and
(iii) if reasonably requested by the Company, an opinion of counsel,
reasonably satisfactory to the Company that such Transfer will not require
registration of such shares under any applicable securities laws.
(e) [*] shall not, except as otherwise specifically provided in this
Agreement, Transfer any of its Securities.
(f) Notwithstanding Section 13(e), [*] may Transfer all or any portion
of its Securities (i) to any Person, provided that [*] and its Affiliates
continue to own at least [*] of the Securities owned by [*] at the close of
business on the Effective Date and subsequently acquired by [*] pursuant to
Sections 11 and 18 of this Agreement, or (ii) after the closing of [*], to
any Person upon the completion of such Party's compliance with the
restrictions imposed by Section 14 of this Agreement.
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(g) In the case of any Transfer permitted under Section 13(f)(i), [*]
shall deliver to [*] (i) at least ten (10) business days prior to such
Transfer, a written notice stating its intention to Transfer the Securities
to be Transferred, the name of the transferee, whether such transferee is
an Affiliate, the number of Securities to be Transferred, and the price and
other material terms and conditions of the Transfer, (ii) except as
otherwise specifically provided herein, on or prior to the effective date
of the Transfer and in a form reasonably acceptable to the Company and its
counsel, the transferee's written acknowledgement of and agreement to be
bound by, and to vote the Transferred Securities at all times in accordance
with, the terms of this Agreement and any other Transaction Agreement and
(iii) if reasonably requested by the Company, an opinion of counsel,
reasonably satisfactory to the Company that such Transfer will not require
registration of such shares under any applicable securities laws.
14. "Market Stand-Off" Agreement. Each of Ariba, SOFTBANK Parent and
SOFTBANK hereby agrees that it will not, without the prior written consent of
the managing underwriter, during the period commencing on the date of the final
prospectus relating to the Company's IPO and ending on the date specified by the
Company and the managing underwriter(s) (such period not to exceed one hundred
eighty (l80) days) (i) lend, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise Transfer, directly or
indirectly, any Securities, or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Securities, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Securities, in cash or
otherwise. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 14 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a Party hereto.
Notwithstanding the foregoing provisions of this Section 14, the
obligations of Ariba, SOFTBANK Parent and SOFTBANK under this Section 14 shall
not be more restrictive than the least restrictive "market standoff" obligations
to which any of the Company's executive officers, directors or 10% or greater
shareholders are subject. In order to enforce the foregoing covenant, the
Company may to the extent permitted by applicable law impose stop-transfer
instructions with respect to the Shares owned by the Investor (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period.
15. Exclusivity.
(a) During the term of this Agreement, [*] agrees that it will not,
and will not permit any Affiliate in which [*] directly or indirectly holds
a fifty percent (50%) or greater ownership interest (a "Subject
Affiliate"), to do any of the following:
(i) [*].
(ii) [*];
(iii) [*]; or
(iv) [*].
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(b) [*].
(c) For purposes of this Section 15, [*] shall not be deemed an
investment fund or investment vehicle or a Subject Affiliate.
(d) This Section 15 shall terminate at such time as [*].
16. Co-Sale Rights.
(a) If any [*] desires to Transfer any of its Securities (the "Offered
Co-Sale Securities") to any Person (other than [*]) and such Offered
Co-Sale Securities, together with any Securities previously Transferred by
[*] to Persons (other than [*]) represent [*] or more of the outstanding
Fully Diluted Securities measured at the time of such Transfer, the [*]
(each, a "Co-Sale Shareholder") shall have the right and option to include
a pro rata portion of the Securities to be sold in the proposed sale at the
same price per share and on the same other terms and conditions that apply
to [*] in the proposed sale. Each Co-Sale Shareholder's pro rata portion
shall be equal to the product of (i) the outstanding Securities owned by
such Co-Sale Shareholder divided by the outstanding Securities owned by [*]
and all Co-Sale Shareholders who duly elect to sell Securities in the
transaction, multiplied by (ii) the total number of Securities proposed to
be sold in the transaction. The number of Offered Co-Sale Securities to be
sold by [*] in the transaction shall be reduced to the extent that Co-Sale
Shareholders elect to participate in the transaction.
(b) [*] shall give notice to each Co-Sale Shareholder of the proposed
sale. Such notice shall contain the proposed sales price per share and the
other material terms and conditions on which [*] desires to sell the
Offered Co-Sale Securities. Each Co-Sale Shareholder may exercise its right
to participate in the sale pursuant to this Section 16 by giving notice to
[*] and each other Co-Sale Shareholder within fifteen (15) days after
receipt of such notice from [*].
17. Additional Capital. If the Company seeks to raise additional capital
primarily for financing rather than strategic purposes, the Company shall [*],
provided that [*]shall be determined by the Board in its sole good faith
discretion.
18. Right of First Offer.
(a) Subject to the terms and conditions specified in this Section 18,
the Company hereby grants to each Investor a right of first offer with
respect to future sales by the Company of its Securities. Each time the
Company proposes to offer any Securities, the Company shall first make an
offering of the Securities to the Investors in accordance with the
following provisions.
(b) The Company shall deliver a notice in accordance with Section 26.2
("Notice") to each Investor stating (i) its bona fide intention to offer
the Securities, (ii) the number of Securities to be offered (the "Offered
Securities"), and (iii) the price and terms upon which it proposes to offer
the Offered Securities.
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(c) By written notification received by the Company, within twenty
(20) calendar days after receipt of the Notice, the Investor may elect to
purchase or obtain, at the price and on the terms specified in the Notice,
up to that portion of the Offered Securities that equals the proportion
that the number of shares of Securities issued and held by the Investor,
after giving effect to the exchange, exercise and conversion of all
Securities held by Investor that are exchangeable and exercisable for and
convertible into Securities, bears to the total number of shares of
Securities then outstanding, after giving effect to the exchange, exercise
and conversion of all securities then outstanding that are exchangeable and
exercisable for and convertible into Securities.
(d) Notwithstanding Section 18(c), [*].
(e) If all Offered Securities that Investors are entitled to obtain
pursuant to Sections 18(c) and (d) are not elected to be obtained as
provided in Sections 18(c) and (d) hereof, the Company may, during the one
hundred twenty (120) day period following the expiration of the period
provided in subsection 18(c) hereof, offer the remaining unsubscribed
portion of such Offered Securities to any person or persons at a price not
less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Company does not enter into an agreement
for the sale of the Offered Securities within such period, or if such
agreement is not consummated within sixty (60) days of the execution
thereof, the right provided hereunder shall be deemed to be revived and
such Offered Securities shall not be offered unless first reoffered to the
Investor in accordance herewith.
(f) The right of first offer in this Section 18 shall not be
applicable to (i) the issuance or sale of shares of Common Stock (or
options therefor) to employees, directors and consultants for the primary
purpose of soliciting or retaining their services; (ii) the issuance of
Securities pursuant to a bona fide public offering of shares of Common
Stock, (iii) the issuance of Securities in connection with a bona fide
business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise, (iv)
the issuance of stock, warrants or other Securities or rights not primarily
for equity financing purposes to persons or entities with which the Company
has business relationships or will have a strategic business relationship
following such issuance, (vi) [*]. The right of first offer in Section
18(c) [*] shall terminate upon the closing of the IPO.
19. IPO Commitment.
(a) The Parties intend that, on or prior to the [*] anniversary of the
Effective Date, the Company will seek to conduct an initial public offering
of shares of its Common Stock ("IPO"), subject to prevailing market
conditions and the condition and performance of the Company.
(b) [*].
(c) Each shareholder agrees to enter into a customary market standoff
agreement with the underwriter(s) in the IPO with substantially the same
terms and conditions as set forth in Section 14.
11
20. Certain Breaches. If [*] alleges in writing to the Company, after
consultation with its outside counsel, that it is probable that [*] has breached
any contract between [*], on the one hand, and the Company or any of its
controlled Affiliates, on the other hand, the Board shall at the request of [*]
form a committee of the Board (the "Litigation Committee") consisting of [*].
The Committee shall have the sole and exclusive authority to (i) determine
whether to assert on behalf of the Company that [*] has breached any such
contract and (ii) if any such assertion is made, to control the resolution of
any such dispute, but only if such dispute is resolved through the dispute
resolution process set forth in Section 26.1 hereof as if applicable to disputes
referred to in this Section 20. [*] agrees, upon behalf of itself and [*] and
the Company agrees on behalf of itself and its controlled Affiliates to submit
any such dispute to the dispute resolution process set forth in Section 26.1
hereof. Notwithstanding the foregoing, this Section 20 shall not apply to any
claims for breach of contract that are released and discharged pursuant to
Section 1 of the Release. Prior to March 31, 2004, no action by the Litigation
Committee pursuant to this Section 20 shall constitute an election to terminate
the Distribution Agreement for any purpose.
21. Modification of Transaction Agreements.
(a) [*].
(b) [*].
(c) [*].
(d) [*].
22. Representations and Warranties of SOFTBANK and SOFTBANK Parent. Each of
SOFTBANK and SOFTBANK Parent hereby represents and warrants to Ariba and the
Company that, as of the Effective Date, the following statements are and shall
be true and correct:
(a) Organization. Each of SOFTBANK and SOFTBANK Parent is a
corporation duly organized and validly existing under the laws of Japan,
and has the corporate power and authority to enter into and perform this
Agreement and the other Transaction Agreements to which it is a party.
(b) Permits; Approvals. Each of SOFTBANK and SOFTBANK Parent holds all
licenses, permits, certifications and other authorizations, the absence of
which would have a material adverse effect on its financial condition or
business, and there has been no default or violation under any such
authorization and there is no proceeding or investigation that is pending
or, to each such Party's knowledge, threatened under which any such
authorization may be revoked, terminated or suspended.
(c) Authorization. All corporate action on the part of each of
SOFTBANK and SOFTBANK Parent necessary for the authorization, execution and
delivery of this Agreement and the other Transaction Agreements to which it
is a party and for the performance of all of its obligations hereunder and
thereunder has been taken, and this Agreement and the other Transaction
Agreements to which it is a party when fully executed and
12
delivered, shall each constitute a valid, legally binding and enforceable
obligation of each such Party.
(d) Government and Other Consents. No consent, authorization, license,
permit, registration or approval of, or exemption or other action by, any
governmental or public body or authority, or any other Person, is required
in connection with the execution, delivery and performance by each of
SOFTBANK and SOFTBANK Parent of this Agreement and the other Transaction
Agreements to which it is a party, or if any such consent is required, each
such Party has satisfied the applicable requirements.
(e) Effect of Agreement. The execution, delivery and performance of
this Agreement and the other Transaction Agreements to which SOFTBANK or
SOFTBANK Parent is a party will not (i) violate the Articles of
Incorporation of such party or any provision of any law, statute, rule or
regulation to which such party is subject, (ii) violate any judgment,
order, writ, injunction or decree of any court applicable to such party,
(iii) have any effect on the compliance of such party with any applicable
licenses, permits or authorizations which would materially and adversely
affect such party, (iv) result in the breach of, give rise to a right of
termination, cancellation or acceleration of any obligation with respect to
(presently or with the passage of time), or otherwise be in conflict with
any term of, or affect the validity or enforceability of, any agreement or
other commitment to which such party is a party and which would materially
and adversely affect such party or (v) result in the creation of any lien,
pledge, mortgage, claim, charge or encumbrance upon any assets of such
party.
(f) Litigation. There are no actions, suits or proceedings pending or,
to such party's knowledge, threatened, against such party before any court
or governmental agency which question such party's right to enter into or
perform its obligations under this Agreement or the other Transaction
Agreements to which it is a party, or which question the validity of this
Agreement or any of the other Transaction Agreements.
(g) Disclosure. No representation or warranty by SOFTBANK or SOFTBANK
Parent contained in this Agreement or in any other Transaction Agreements
to which such party is a party, and no exhibit, writing or other instrument
required to be furnished by such party pursuant hereto or thereto contains
any untrue statement of a material fact or omits any material fact
necessary in order to make the statements and information contained herein
or therein not misleading.
23. Representations and Warranties of Ariba. Ariba hereby represents and
warrants to SOFTBANK Parent and SOFTBANK that, as of the Effective Date, the
following statements are true and correct:
(a) Organization. Ariba is a corporation duly organized and validly
existing under the laws of Delaware. Ariba has the corporate power and
authority to enter into and perform this Agreement and the other
Transaction Agreements to which it is a party.
(b) Permits; Approvals. Ariba holds all licenses, permits,
certifications and other authorizations, including without limitation any
such authorizations
13
required under U.S. federal securities laws, the absence of which would
have a material adverse effect on the financial condition or business of
Ariba, and there has been no default or violation under any such
authorization and there is no proceeding or investigation that is pending
or, to Ariba's knowledge, threatened under which any such authorization may
be revoked, terminated or suspended.
(c) Authorization. All corporate action on the part of Ariba necessary
for the authorization, execution and delivery of this Agreement and the
other Transaction Agreements to which it is a party and for the performance
of all of its obligations hereunder and thereunder has been taken, and this
Agreement, the Distribution Agreement and the other Transaction Agreements
to which it is a party, when fully executed and delivered, shall each
constitute a valid, legally binding and enforceable obligation of Ariba.
(d) Government and Other Consents. Except as disclosed in the
Transaction Agreements, no consent, authorization, license, permit,
registration or approval of, or exemption or other action by, any
governmental or public body or authority, or any other Person, is required
in connection with Ariba's execution, delivery and performance of this
Agreement or the other Transaction Agreements to which it is a party, or if
any such consent is required, Ariba has satisfied any applicable
requirements.
(e) Effect of Agreement. Ariba's execution, delivery and performance
of this Agreement and the other Transaction Agreements to which it is a
party will not (i) violate the Certificate of Incorporation of Ariba or any
provision of any law, statue, rule or regulation to which it is subject,
(ii) violate any judgment, order, writ, injunction or decree of any court
applicable to Ariba, (iii) have any effect on the compliance of Ariba with
any applicable licenses, permits or authorizations which would materially
and adversely affect Ariba, (iv) result in the breach of, give rise to a
right of termination, cancellation or acceleration of any obligation with
respect to (presently or with the passage of time), or otherwise be in
conflict with, any term of, or affect the validity or enforceability of any
agreement or other commitment to which Ariba is a party and which would
materially and adversely affect Ariba, or (v) result in the creation of any
lien, pledge, mortgage, claim, charge or encumbrance upon any assets of
Ariba.
(f) Litigation. There are no actions, suits or proceedings pending or,
to Ariba's knowledge, threatened, against Ariba before any court or
governmental agency which question Ariba's right to enter into or perform
this Agreement or other Transaction Agreements to which it is a party, or
which question the validity of this Agreement or any of the other
Transaction Agreements.
(g) Disclosure. No representation or warranty by Ariba contained in
this Agreement or any other Transaction Agreement to which it is a party,
and no exhibit, writing or other instrument required to be furnished
pursuant hereto contains any untrue statement of a material fact or omits
any material fact necessary in order to make the statements and information
contained herein or therein not misleading.
14
24. Effectiveness, Term and Termination.
24.1 Term. This Agreement shall be effective as of the Effective Date and
shall continue in effect until and unless terminated pursuant to Section 24.2.
24.2 Termination. This Agreement may be terminated as follows:
(a) Upon the Parties' mutual written agreement.
(b) By either Ariba or the Company, effective immediately upon written
notice to the other Parties, if either SOFTBANK Parent or SOFTBANK breaches
any material provision of this Agreement or of any of the other Transaction
Agreements in any material respect and such breach continues for a period
of thirty (30) days after the delivery of written notice of the default,
describing the default in reasonable detail.
(c) By either SOFTBANK Parent or SOFTBANK, effective immediately upon
written notice to the other Parties, if Ariba or the Company breaches any
material provision of this Agreement or of any of the other Transaction
Agreements in any material respect and such breach continues for a period
of thirty (30) days after the delivery of written notice of the default,
describing the default in reasonable detail.
(d) By Ariba, effective immediately upon written notice to the other
Parties in the event that either Ariba or the Company (except, in the case
of the Company, while a Control Shift is in effect) has elected to
terminate [*] in accordance with its terms.
(e) By either SOFTBANK Parent, SOFTBANK, Ariba or the Company,
effective immediately upon written notice to the other Parties, in the
event that any other Party is dissolved, liquidated or declared bankrupt or
a filing for voluntary or involuntary.
(f) Notwithstanding the foregoing, the right of SOFTBANK and SOFTBANK
Parent to terminate this Agreement (i) pursuant to Section 24.2(c), as a
result of a breach by the Company, or (ii) pursuant to Section 24.2(d), as
a result of a termination of [*], shall exist only if [*] and only if no
[*] is in effect.
(g) For purposes of this Section 24.2, the term "Transaction
Agreements" has the same meaning given to such term in Section 8.2(f) of
the Stock Purchase Agreement.
24.3 Continuing Liability. Notwithstanding the foregoing, Article 25 and
Article 26 (except for Section 26.6, which shall not survive termination) shall
survive a termination of the Agreement. Termination of this Agreement for any
reason shall not release any Party from any liability or obligation which has
already accrued as of the effective date of such termination, and shall not
constitute a waiver or release of, or otherwise be deemed to prejudice or
adversely affect, any rights, remedies or claims, whether for damages or
otherwise, which a Party may have hereunder, at law, equity or otherwise or
which may arise out of or in connection with such termination.
15
25. Incidental and Consequential Damages.
NO PARTY NOR ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTIES UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION LOST PROFITS)
WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT.
EACH PARTY AGREES AND ACKNOWLEDGES THAT MONEY DAMAGES MAY NOT BE AN ADEQUATE
REMEDY FOR ANY BREACH OF THE PROVISIONS OF THIS AGREEMENT AND THAT EACH PARTY
MAY, IN ITS SOLE DISCRETION, APPLY FOR SPECIFIC PERFORMANCE AND INJUNCTIVE
RELIEF IN ORDER TO ENFORCE OR PREVENT ANY VIOLATIONS OF THE PROVISIONS OF THIS
AGREEMENT.
26. Miscellaneous.
26.1 Governing Law; Dispute Resolution. The validity, construction and
enforceability of this Agreement and all related agreements, collectively or
separately, shall be governed by and construed in accordance with the laws of
the State of California. The Parties shall attempt to resolve all disputes
between the Parties arising out of or relating to this Agreement amicably
through good faith discussions upon the written request of any Party. In the
event that any such dispute cannot be resolved thereby within a period of sixty
(60) days after such notice has been given (the last day of such sixty (60) day
period being herein referred to as the "Arbitration Date"), such dispute shall
be finally settled by arbitration in San Francisco, California, using the
English language in accordance with the Arbitration Rules and Procedures of JAMS
then in effect, by one or more commercial arbitrator(s) with substantial
experience in resolving complex commercial contract disputes, who may or may not
be selected from the appropriate list of JAMS arbitrators. If the Parties cannot
agree upon the number and identity of the arbitrators within fifteen (15) days
following the Arbitration Date, then a single arbitrator shall be selected on an
expedited basis in accordance with the Arbitration Rules and Procedures of JAMS.
Any arbitrator so selected shall have substantial experience in the software
industry. The arbitrator(s) shall have the authority to grant specific
performance and to allocate between the Parties the costs of arbitration
(including service fees, arbitrator fees and all other fees related to the
arbitration) in such equitable manner as the arbitrator(s) may determine. The
prevailing Party in the arbitration shall be entitled to receive reimbursement
of its reasonable expenses (including reasonable attorneys' fees, expert witness
fees and all other expenses) incurred in connection therewith. Judgment upon the
award so rendered may be entered in a court having jurisdiction or application
may be made to such court for judicial acceptance of any award and an order of
enforcement, as the case may be. Notwithstanding the foregoing, each Party shall
have the right to institute an action in a court of proper jurisdiction for
preliminary injunctive relief pending a final decision by the arbitrator(s),
provided that a permanent injunction and damages shall only be awarded by the
arbitrator(s). For all purposes of this Section 26.1, the Parties consent to
exclusive jurisdiction and venue in the United States federal Courts located in
the Northern District of California. For the avoidance of doubt, the validity,
construction, and enforceability of this Agreement and the resolution of
disputes arising out of and relating to this Agreement and any related
agreements (other than an action solely between Nihon Ariba K.K. and Softbank
Commerce Corporation relating solely to the Amended Master Alliance
16
Agreement), collectively or separately, shall be governed solely by this Section
26.1, notwithstanding that (i) the Amended Master Alliance Agreement is governed
by Japanese law and uses a different dispute resolution procedure or (ii)
disputes arising out of or relating to this Agreement are, or are asserted to,
in any way relate to or be based on similar facts as disputes arising out of or
relating to the Amended Master Alliance Agreement.
26.2 Notices and Other Communications. Unless otherwise provided, any
notice required or permitted under this Agreement shall be given in writing and
in English and shall be deemed effectively given (i) upon personal delivery to
the party to be notified, (ii) by delivery by confirmed facsimile or (iii) three
(3) Business Days after being provided to an internationally recognized courier
service with an expected delivery of no more than three (3) business days, in
each case to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other Parties:
(a) If to SOFTBANK Parent
[*]
with a copy to:
[*]
(b) If to SOFTBANK
[*]
with a copy to:
[*]
(c) If to the Company
[*]
with a copy to:
[*]
(d) If to Ariba
[*]
with a copy to:
[*]
26.3 Language. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall
17
be for accommodation only and shall not be binding upon the Parties. All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language.
26.4 Severability. If any provision in this Agreement shall be found or be
held to be invalid or unenforceable (including, without limitation, as a result
of objections by the Japanese Fair Trade Commission) then the meaning of said
provision shall be construed, to the extent feasible, so as to render the
provision enforceable, and if no feasible interpretation would save such
provision, it shall be severed from the remainder of this Agreement which shall
remain in full force and effect unless the severed provision is essential and
material to the rights or benefits received by any Party. In such event, the
Parties shall use commercially reasonable efforts to negotiate, in good faith, a
substitute, valid and enforceable provision or agreement which most nearly
affects the Parties' intent in entering into this Agreement.
26.5 References; Subject Headings. Unless otherwise indicated, references
to Sections and Exhibits herein are to Sections of, and Exhibits to, this
Agreement. The subject headings of the Sections of this Agreement are included
for the purpose of convenience of reference only, and shall not affect the
construction or interpretation of any of its provisions.
26.6 Further Assurances. The Parties shall each perform such acts, execute
and deliver such instruments and documents, and do all such other things as may
be reasonably necessary to accomplish the transactions contemplated in this
Agreement.
26.7 Expenses. Each of the Parties will bear its own costs and expenses,
including, without limitation, fees and expenses of legal counsel, accountants,
brokers, consultants and other representatives used or hired in connection with
the negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby.
26.8 No Waiver. No waiver of any term or condition of this Agreement shall
be valid or binding on a Party unless the same shall have been set forth in a
written document, specifically referring to this Agreement and duly signed by
the waiving Party. The failure of a Party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the ability of a Party to enforce each and every such provision
thereafter.
26.9 Entire Agreement; Amendments. The terms and conditions contained in
this Agreement (including the Exhibits hereto) and the other Transaction
Agreements constitute the entire agreement between the Parties and supersede all
previous agreements and understandings, except for the Ariba Non-Disclosure
Agreement, whether oral or written, between the Parties with respect to the
subject matter hereof. No agreement or understanding amending this Agreement
shall be binding upon any Party unless set forth in a written document in
English which expressly refers to this Agreement and which is signed and
delivered by duly authorized representatives of each Party.
26.10 Assignment. No Party shall assign this Agreement (or any right or
obligation hereunder) without the other Parties' prior written consent, except
that (i) [*] may
18
assign this Agreement to a Person into which it has merged or which has
otherwise succeeded to all or substantially all of [*] business or assets and
(ii) [*] may assign this Agreement to a Person that is a wholly owned subsidiary
of [*], respectively, or a Person who has succeeded to all or substantially all
of the business or assets of [*], respectively. All assignees under this Section
26.10 must assume in writing or by operation of law, the assigning Party's
obligations under this Agreement, provided, however, that the assigning Party
shall remain liable for the assignee's performance of its obligations hereunder.
This Agreement shall inure to the benefit of, and shall be binding upon, the
Parties and their respective permitted successors and assigns.
26.11 No Agency. The Parties are independent contractors. Nothing contained
herein or done in pursuance of this Agreement shall constitute any Party the
agent of any other Party for any purpose or in any sense whatsoever.
26.12 No Beneficiaries. Nothing herein express or implied, is intended to
or shall be construed to confer upon or give to any person, firm, corporation or
legal entity, other than the Parties, any interests, rights, remedies or other
benefits with respect to or in connection with any agreement or provision
contained herein or contemplated hereby.
26.13 Counterparts. This Agreement may be executed in any number of
counterparts, and each counterpart shall constitute an original instrument, but
all such separate counterparts shall constitute only one and the same
instrument.
19
IN WITNESS WHEREOF, the Parties have caused their respective duly
authorized representatives to execute this Agreement as of the date hereof.
SOFTBANK CORP.
By: /s/ Xxxxxxxxx Xxx
--------------------------------------
Title: President and CEO
-----------------------------------
SOFTBANK EC HOLDINGS CORP.
By: /s/ Xxx Xxxxxxxx
--------------------------------------
Title: President and CEO
-----------------------------------
ARIBA, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Title: President and CEO
-----------------------------------
NIHON ARIBA K.K.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Title: President and CEO
-----------------------------------
Exhibit 1.27
[*]
Exhibit 4(d)
[*]
[*]
Exhibit 21(b)
[*]
(3) [*]
Schedule 15
[*]
[*]
